Low-means assessment & residential care

If you move into residential aged care, you can elect to have a means-test assessment undertaken by Services Australia (or Veterans’ Affairs) to calculate a means-test amount (MTA). The means-test amount is calculated from a complex formula that combines assessable assets and income to create a daily measure of “affordability”.

The MTA is then used for two purposes:

1. To determine whether you are classified as low-means (or not) to determine the rules for subsidising accommodation, and
2. To calculate your contribution towards your cost of care (through a means-tested fee).

You will be a low-means resident if you are assessed to have low financial capacity. Under current rates, this requires a means-test amount (MTA) lower than $65.49 as at the date of permanent entry into residential care. The MTA is based on a combination of assets and income.

Tip: If your assessable assets are $193,219.20 (equal to the capped value for the home) or more, you will not qualify as low-means. If you are a member of a couple, assets and income are combined and then split equally. To qualify as low-means, your half of assessable assets needs to be less than $193,219.20. Rates to 30 June 2023.

You may also hear low-means residents being referred to as supported or concessional residents.

Residential aged care costs are subsidised by the Federal Government. For standard (full-fee paying) residents, the government only subsidises the cost of care, and not the cost of accommodation. But for a low-means resident, the government subsidises both care and accommodation.

The room prices published by the care provider do not apply for a low-means resident. Instead, the government sets the room price at one of four price points depending on the classification of the care provider. This is set as a daily fee but can be converted to a lump sum equivalent.

The resident will pay a daily room price (called a daily accommodation contribution – DAC) which is equal to the lesser of their calculated MTA and the applicable room price. The government pays the balance as an accommodation supplement to the care provider. The MTA is reassessed quarterly, and this will be reflected in the DAC payable by the person following that reassessment.